Tesco- Understanding the economy and its effects on the business.

Supply at Tesco PLC

Supplies from Tesco diminished during the recession, Tesco supplied various produce and services from petrol services to things like stationaries for school. The supplies obviously changed during the recession compared to the way it was before.  Tesco’s Supplies suffered Because of their prices, customers during the recession were after products that offered good value for money, cheap in a way. But because Tesco’s produces and services weren’t the at the price customer wanted, they switched to other suppliers

Also another way these supplies changes was that Tesco only provided their supplies on demands because of the recession. Customers could not afford luxurious products or things they might not use a lot. Suppliers such as Tesco couldn’t produce too much or they were going to lose out on because of the lack of sales so suppliers would only produce according their demands

How families might have been affected by the recession and fiscal and monetary policy measures put in place by the government during and after the recession (sheet 7)

During the recession typical families have been affected by not being able to enjoy the luxury and things that are deemed not important enough. So instead of enjoying expensive holidays to other countries now and then people just stayed in the UK and go on family trips to places like haven. Some people starting cutting back on luxury stuff like expensive cars and switching to cheaper and stable cars in order to spend less

Also most people during the recession were shopping around and to find the cheapest products and the one that offered good value for money. This cased businesses like Tesco to lose out to competitor such as Aldi who offered much cheaper products which fitted the pockets of customers

The government took measures such as monetary and fiscal policies, the aims of these policies were to keep inflation levels as low as possible, maintain the positive growth of the economy (this is close to 2.5%). Also these policies aimed to provide full employment and reduce cyclical fluctuations in the economic cycle

One of the key factors leading to the recession was increasing unemployment, as know unemployment is bad for the economy because it causes the government to spend more and reduces fund for other important things. In order to reduce unemployment in the future, the government raised the school leaving age from 16 years old to 18 years old. This was done because researches showed that people staying in school till 18 had more chance to earn money

Global interaction and Tesco

Tesco has benefited from international supply chains by expanding and dealing with many countries across the globe, the benefits of these trades is that it helped them provide their customers with varied range goods and good quality of food from various countries.

For example benefits from their international supply chain by obtaining thing such as exotic products like mango, guava etc... These are some of the product that consumers demand but be grown in the UK. Tesco and its customers can access these products thanks to the international supply chains and relationship they have with other countries.

Tesco benefits from national supply chains by being able to access most a lot of brand within the UK such as “walker” and others. These are the type of food customer demands from Tesco and because of their national supply chain they can afford to satisfy these customers’ demands.

From local supply chain Tesco has been able to provide quality fundamental food such as milk, meat and bread from local farms. Tesco uses this supply chains to provide quality local food that customers are expecting from them.

Tesco being the biggest food retail in UK has expanded geographically in several new markets around the globe. Currently Tesco operates in 11 different countries in some of which they have obtained full ownership of business which means that they were fully allowed to establish themselves in these countries. In others not so much, Tesco wasn’t given full ownership in some of the countries where the currently operate but instead they were allowed to cooperate with other companies within these countries. For example in India, Tesco was given only part of an ownership which means they had to cooperate with another company if they wanted to stay and operate in India.

Because growth of businesses in the UK are regulated is always regulated by the (CMA) for the benefits of consumers, other businesses and the economy, businesses like Tesco can’t go any bigger than they already are even if they wanted to. Du to this, businesses are forced to go compete in other countries where they can actually expand further and achieve their aims. By operating abroad, Tesco reduces the ability of the government to regulate them in ways like building more partnership to expand.